That's roughly equal to the number of smartphones, smart TVs, tablets, wearable computers, and PCs combined.

There are already clear signs that the biggest tech companies - and even smaller players - are trying to get out front of the race to dominate the IOT. Google has acquired Nest. Apple has unveiled its HomeKit platform. Even Staples and Honeywell - not typically companies thought of as tech leaders - are putting out new IOT-related products.

In the report, we also find that there's a huge amount of innovation happening in the business-to-business IOT space right now.

Here's a look at some of the most important enterprise applications that are already being developed:

Connected advertising and marketing.Cisco believes that this category (think Internet-connected billboards) will be one of the top three IoT categories, along with smart factories, and telecommuting support systems.

Intelligent traffic management systems. Machina research, in a paper prepared for the GSM Association, sees $100 billion in revenue by 2020 for applications such as toll-taking and congestion penalties. A related revenue source will be smart parking-space management, expected to drive $30 billion in revenue.

Waste management systems. In Cincinnati, residential waste volume fell 17% and recycling volume grew by 49% through use of a "pay as you throw" program that used IoT technology to monitor those who exceed waste limits.